1.      Heard Ms. Shobha Gupta, Advocate, for the complainant and Mr. Niraj Singh, Advocate, for the opposite parties.

2.      M/s. Chandra Electronic Appliances Pvt. Ltd. (the Insured) has filed above complaint, for directing National Insurance Company Limited (the Insurer) to pay Rs.37176372/- with interest @18% per annum from due date till the date of payment, towards balance insurance claim, Rs.15/- lacs, as the compensation for mental agony and harassment, Rs.35/- lacs, as the compensation for business loss, Rs.5/- lacs, as the cost of litigation and any other relief, which is deemed fit and proper in the facts and circumstances of the case.

3.      The complainant stated that M/s. Chandra Electronic Appliances Pvt. Ltd. (the Insured) was a company, incorporated under the Companies Act, 1956, in the year 1996 and engaged in the business of electronic items. The Insured took a warehouse, admeasuring 16332 sq.ft. (15532 sq.ft. RCC roofed building and 800 sq.ft. tin shed building) at E-168, Road No.-9-J, Vishwakarma Industrial Area, Jaipur, Rajasthan, on lease, vide lease deed dated 04.12.2015. This warehouse was shared by M/s. Gaurav Aircon Computers Pvt. Ltd. to the extent of 3200 sq.ft. and its sister concerns M/s. Ganesham Electrotech Supermarket Private Limited to the extent of 5500 sq.ft., M/s. Chandra Electronics Appliances Pvt. Ltd. to the extent of 5032 sq.ft., M/s. Chandra Entrepreneurs Pvt. Ltd to the extent of 800 sq.ft. and M/s. Vareto Electro Pvt. Ltd. to the extent of 1800 sq.ft. National Insurance Company Limited (the Insurer) was a public insurance company and used to provide different insurance services to the public. The Insured obtained “Standard Fire And Special Perils Policy” No.376002111610000161 from National Insurance Company Limited (the Insurer), for the period of 30.03.2017 to 29.03.2018, for a sum insured of Rs.10/- crores, on the Stock of Electric, Electronics and Health Equipment, Mobile, T.V., Fridge, A.C., L.C.D. Mobile, Computer, UPS and similar types of Electronic Items, stored at E-168, Road No.-9-J, Vishwakarma Industrial Area, Jaipur.

4.      Major fire broke out at the warehouse of the Insured in morning of 26.04.2017. Ishwar Lal Meena, the Security Guard on duty at the warehouse noticed the fire at 7:00 hours and immediately informed Ashish Dhoka, son of the director Lalit Dhoka, on telephone. Lalit Dhoka immediately informed Fire Service Station, at Vishwakarma Industrial Area, Jaipur, from where, 7 fire tenders were deputed on the spot, who could control the fire at about 20:00 hours on 26.04.2017. The Insured informed the fire incident to the local police station on 28.04.2017, where it was noted in General Diary at 21.05 hours. The Insured informed the Insurer on telephone about the fire incident at its warehouse on 26.04.2017. The Insurer appointed G.L. Sharma, Surveyors & Loss Assessors, Jaipur as the preliminary surveyor on 26.04.2017, who visited the spot on 26.04.2017, inspected the warehouse and took photographs. G.L. Sharma submitted Preliminary Survey Report dated 27.04.2017 that warehouse consisted 4 halls i.e. three RCC roofed halls and one tin shed hall, out of which two RCC roofed halls and one tin shed hall were fully affected with fire and the stock stored there were completely burnt and destroyed. One RCC roofed hall was safe and stock of that hall were shifted to other location. The Insurer appointed Sanjay Dwivedi & Associates, Delhi as the surveyor on 26.04.2017. The surveyor visited the spot on 27.04.2017. He inspected the fire affected premises on the same day and on subsequent dates. The surveyor asked the Insured to segregate the burnt stock according to its product category. The surveyor, vide letter dated 02.05.2017 asked the Insured to submit claim form and the requisite papers for assessment of loss. After segregation of burnt stock, the surveyor verified them on 14.05.2017 and prepared its lists. The Insured submitted claim form and supplied all the papers up to 02.06.2017 to prove the incident and assess the loss. The surveyor submitted Final Survey Report dated 09.10.2017, to the Insurer, assessing the loss of Rs.60204909/-. Then the papers were examined by the competent authority, who accepted the report dated 09.10.2017, adding salvage value in it and sent discharge voucher to the Insured for signature on 26.03.2018 and after signing the discharge voucher, payment of Rs.60243361/- was made to the Insured on 29.03.2018.

5.      The Insured gave a legal notice dated 15.04.2018, for payment of further an amount of Rs.40335017.35/-. In spite of service of notice, the Insurer did not respond then this complaint was filed on 29.03.2019, claiming deficiency in service. The complainant stated that the Insured submitted claim for Rs.82996918/-. The surveyor verified the damaged articles and the list of damaged articles were found to be correct with small variation. But the surveyor illegally deducted Rs.2081007/- on account of average discount @3.07% on purchase, Rs.1314085/- as dead stock @2%, Rs.9745726/- as VAT on the damaged stock, Rs.5465946/- as purchase price worked out on average price basis instead of actual cost of damaged stock and Rs.3168679/- under Excess clause. The Insured challenged these deductions in the complaint. Apart from it, the Insured claimed Rs.322508/- towards rent of warehouse, Rs.9246137/- as interest from 26.04.2017 to 28.03.2018, Rs.5697284/- as interest from 29.03.2018 to 31.03.2019 and other compensation.

6.      The Insurer filed its written reply on 05.07.2019 and contested the complaint. The Insurer stated that the Insured signed the discharge voucher on 26.03.2018 and accepted payment of Rs.60243361/- on 29.03.2018 as full and final settlement, without protest, as such, the complaint is not maintainable. The facts relating to insurance and loss occurred to the Insured due to fire on 26.04.2017 have not been disputed. The Insurer stated that admittedly all the original records relating to the damaged goods were burnt. The Insured provided duplicate invoices relating to purchase of the damaged goods on FIFO basis but has not provided details of goods sold, as such, it was not possible for the surveyor to determine the value of damaged goods. The surveyor found that during physical verification it was not possible to tally make and model of different goods. Therefore average price on item-wise purchase details from 01.04.2016 to 25.04.2017, as supplied by the Insured was taken for determination of the loss. As per balance sheet of FY 2015-2016, the Insured showed Rs.34352302/- as income from discount received on purchase. Total purchase of FY 2015-2016 was of Rs.1118176321/- as such the surveyor worked out discount @3.07% on the damaged goods. As against the entry in balance sheet, now the Insured is saying that it was sales incentive, which is not liable to be accepted. As per Provisional Trading Account for the period of 01.04.2016 to 31.03.2017, opening stock was shown as Rs.173732505/- and closing stock was shown as Rs.121237012/- as such the surveyor assessed dead stock of 2%. VAT was payable on sale of the goods. The damaged goods were unsold in the warehouse of the Insured. In VAT Returns submitted by the Insured, value of the good was separately shown and VAT payable on it was separately shown. The Insured was not liable to pay VAT on the damaged goods as such VAT amount was rightly deducted by the surveyor. The policy was on market value basis, which does not mean that it included taxes payable on it. The Insured was maintaining record of stock value excluding taxes payable on it. Excess clause has been provided under the policy and deduction under excess clause was according to terms and condition of the policy. Rent of warehouse and salary of the security guard were not insured and claims in this respect are not maintainable. The Insurer is not liable to pay bill of transporting the safe goods abd its storage charge at other godowns. It has been denied that the Insured had to pay any labour charge or to bear any expense for removal of salvage. Settlement of the claim does not suffer from any illegality.   

7.      The Insured filed Rejoinder Reply on 03.10.2019 and Affidavit of Admission/Denial of document of Lalit Kumar Dhoka and  Affidavit of Evidence of Mangilal. The Insurer filed Affidavit of Evidence of Mahesh Naithani, Legal Officer, Affidavit of Evidence of Sanjay Dwivedi, the surveyor and Affidavit of Admission/Denial of document of Ms. Jaisurya Gupta. Both the parties filed their written synopsis.

8.      The counsel for the complainant relied upon the judgments of this Commission in Ashoka Tyre House Vs. Oriental Insurance Company Ltd., I (2004) CPJ 82 NC, in which, it has been held that deduction of 20% for not maintaining physical stock register by the surveyor was illegal. M/s. Harsolia Motors Vs. National Insurance Company Ltd., (2005) 1 CPR (NC) 1, in which, it has been held that contract of insurance is a contract of indemnity and has no motive of profit as such the consumer complaint is maintainable. National Insurance Company Ltd. Shri Giriraj Proteins, (2012) IV CPJ 151 NC, and National Insurance Company Ltd. Vs. Abhoy Shankar Tewari,2017 SCC OnLine NCDRC 825, in which, it has been held that execution of discharge voucher does not create any bar in filing consumer complaint for further amount. CC No.434 of 2016, Modi Dying & Bleaching Works Vs. National Insurance Company Ltd. (decided on 29.10.2021) in which, it has been held deduction of 5%, twice under excess clause was illegal. Dushyant Kumar Gupta Vs. Today Homes & Infrastructure Private Limited, II (2017) CPJ 262 (NC), in which, it has been held that buyer was required to pay taxes along with price of flat to the builder. New India Assurance Company Ltd. Vs. Carpet Emporium, I (2017) CPJ 315 NC, in which, it has been held that although the survey report is an important document but other evidence can be considered in order to examine its validity. Judgment of Supreme Court in M/s. Central Wines Hyderabad Vs. Special Commercial Tax Officer, (1987) 2 SCC 371, in which, it has been held that in making the aggregate for the purposes of turnover, sales tax having been recovered from the purchaser is liable to be included. New India Assurance Company Ltd. vs. Pradeep Kumar, (2009) 7 SCC 787, in which, it has been held that survey report is not a sacrosanct.  Delhi High Court in United India Insurance Company Ltd. Vs. Shreedhar Malik Foods Ltd, 2019 SCC OnLine Del 10516, in which, it has been held that execution of discharge voucher does not create any bar in filing consumer complaint for further amount.

9.      We have considered the arguments of the counsel for the parties and examined the record. The contract of insurance is a contract of indemnity, in which, the Insurer is liable to indemnify the actual loss to the Insured, if the loss falls within the terms and condition of the policy. Admittedly the Insured was engaged in the business of distribution of electronic items. So long as the goods are kept in the warehouse of the Insured, the Insured is not liable to pay VAT on it. It is only when the goods are sold, the Insured is entitled to collect VAT from the purchase and pay it to the Government. If the goods are damaged before sale, the Insured is not liable to pay VAT. Under the contract of indemnity, the Insured can claim actual loss and not speculative profit. Claim for VAT was not maintainable.

10.    Admittedly all original records (hard copies and soft copies) relating to the damaged goods were burnt. The Insured provided duplicate invoices relating to purchase of the damaged goods on FIFO basis but has not provided details of goods sold, as such, it was not possible for the surveyor to determine the value of damaged goods on the basis of duplicate invoices relating to purchase. The surveyor found that during physical verification it was not possible to tally make and model of the damaged goods. Therefore average price on item-wise purchase details from 01.04.2016 to 25.04.2017, as supplied by the Insured was taken for determination of the loss. First-In-First-Out basis is not practicable for electronics goods inasmuch as the customer generally used to purchase latest make and model. It was not safe at all to rely upon the duplicate invoices relating to purchase, produced by the Insured while assessing the loss particularly as per own Provisional Trading Account for the period of 01.04.2016 to 31.03.2017, opening stock was shown as Rs.173732505/- and closing stock was shown as Rs.121237012/-  which shows that huge stock remained unsold in every year. The surveyor has not committed any illegality in this respect.  

11.    As per balance sheet of FY 2015-2016, the Insured showed Rs.34352302/- as income from discount received on purchase. Total purchase of FY 2015-2016 was of Rs.1118176321/-as such the surveyor worked out discount @3.07% on the damaged goods. As against the entry in balance sheet, now the Insured is saying that it was sales incentive, which is not liable to be accepted.

12.    As per Provisional Trading Account for the period of 01.04.2016 to 31.03.2017, opening stock was shown as Rs.173732505/- and closing stock was shown as Rs.121237012/-  as such the surveyor assessed dead stock of 2%. The Provisional Trading Account shows that huge stock remained unsold in every year as such, counting 2% as dead stock for electronic goods was not illegal.

13.    The policy provides 5% excess clause for Act of God and Non-Act of God Perils subject to minimum of Rs. 10000/-. This excess clause has been upheld by Supreme Court in Amravati District Central Co-operative Bank Limited Vs. United India Fire and General Insurance Company Limited, (2010) 5 SCC 294. Deduction under excess clause was according to terms of the policy. Rent of warehouse and salary of the security guard were not insured and claims in this respect are not maintainable. The salvage were auctioned and the Insured did pay any charge or to bear any expense for removal of salvage. As such claim under these heads were not payable. Settlement of the claim does not suffer from any illegality.                                               

14.    Regulation 9 of The Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002 directs the Surveyors to submit their Survey Report within 30 days and in any case within 45 days, from the date of his appointment. The Insurer has been directed to make settlement within 30 days of receipt of Surveyor’s report. Regulation 9 (6) provides as follows:

Regulation-9(6). Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the insured, the payment of the amount due shall be made within seven days from the date of acceptance of the offer of by the insured. In case of delay in the payment, the insurer shall be liable to pay interest at a rate which is 2 per cent, above the bank rate prevalent at the beginning of the financial year, in which the claim is reviewed by it.

          In view of this statutory provision, the Insured is entitled to interest @ 9% per annum after six months of the loss. The Insured submitted all the papers of 02.06.2017. Six months period expired on 02.02.2017. Payment was done on 29.03.2018.  The Insured was entitled for interest at the rate of 9% per annum from 02.12.2017 till 28.03.2018.                                               

O R D E R

          The complaint is partly allowed.  The Insurer is directed to pay interest @ 9% pa from 03.12.2017 to 28.03.2018 on the amount of Rs.60243361/- and thereafter the Insurer shall pay interest on the amount of interest @9% pa till the date of actual payment within period of two months from the date of this judgment.